Strategic Considerations For Start-Up Private Equity Fund Managers

Bradley M. Van Buren is a Partner and Frank M. White Jr. is a Senior Counsel in our Boston office

HIGHLIGHTS:

• Unprecedented barriers of entry — from the uncertainty of Dodd-Frank reforms to the economic downturn — have presented roadblocks to aspiring private equity fund managers in recent years.
• Nevertheless, several strategies — involving spin-outs, independent sponsors and search funds — can help managers establish the track records they need to attract investors for a start-up launch.

Over the past several years, aspiring private equity fund managers looking to launch funds have been faced with unprecedented barriers of entry.

First, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") has been confusing, unpredictable and daunting to many start-up funds. Second, the economic downturn resulted in skepticism from investors, as downward-spiraling portfolio company investments spawned "zombie funds" throughout